Foreclosures in the Salisbury MD Area
Foreclosure, Bank Owned, REO: What does it mean?
Foreclosure is a legal process in which a lender obtains a court ordered termination of a borrower's equitable right of redemption (i.e. the borrower in default's right to recover the property by paying appropriate charges and fees prior to it's sale) Usually a lender obtains a security interest from a borrower who mortgages an asset like a home to secure the loan. If the borrower defaults and the lender tries to repossess the home, the court can grant the borrower equitable right of redemption if the borrower repays the debt. While this equitable right exists, the lender cannot be sure it can repossess the property and can seek to foreclose the equitable right of redemption.
Once the lender takes legal possession of the property, it is usually not in their best interest to hold on to it. Banks make money by lending money, not by selling real estate. The sale of a bank owned property can happen quickly, which can provide motivation for the bank to sell. The proceeds of the sale can then be used to lend out to other borrowers. The terms "bank owned", "foreclosed property" and "REO" (Real Estate Owned) are essentially the same thing.
Salisbury MD Area Home Buyers and Foreclosures
Foreclosed homes in the Salisbury MD area frequently sell for much lower than market value, making them a hot commodity. One reason banks will sell below market value is to get distressed assets off their books. Buyers of foreclosures will also assume the risk from the banks, as these properties are almost always "as-is" sales, making them unlikely candidates for buyers using loan products that are not conventional.
Most Salisbury MD area foreclosure buyers will have a substantial down payment or pay cash for the property outright. Since foreclosures usually aren't in turn-key condition, they are ideal properties for investors who in turn remodel the home for resale or rent.
Content Authored by Dale King